Carrying kids on your car insurance is crazy-expensive, but once they go to college you could save big.
As any parent knows, adding a new driver to your car insurance policy can triple the cost. It’s only fair; teen drivers crash a lot. However, what is not fair is paying that same premium after the kids have had a couple years of driving experience (hopefully free of accidents and tickets). Even more unfair would be paying that full policy premium for a “child, ” now an adult, who is living at school without regular access to your car. The good news is, many insurance companies recognize this scenario and offer multiple types of discounts.
There are three main discounts most live-away college students’ parents will qualify for. The first is often called a “Good Student” discount. This discount is typically offered to the parents of a student on the Honor Roll or any student with a “B” or better average, something almost all college-bound students have earned. The second discount applies to students who will live away from home without regular access to the vehicle for which they are primarily insured. Most insurance companies have a certain distance that they look for in order to apply this discount. They don’t want students who live in the same city or town as the place the car is stored to have this one for obvious reasons. The third discount is the “occasional operator” discount for any family member who only drives the vehicle in unusual circumstances, not to commute to work or school.
The discounts can be significant. We had help from a Safety Insurance Agent in Massachusetts. We priced out the insurance discount for an 18-year old student, who maintained a B average in high school, who was moving to a dorm far from home. The sample vehicle was a well-worn 10-year old compact crossover. The annual insurance adder to that existing policy is about $1,400 for a young driver. The total discounts discussed above were worth about $900, no small thing for a family now paying tuition. A related discount to ask about is a low-miles discount. If that vehicle is going to sit idle much of the time now that junior is off to school, it may earn a 5% discount on the comprehensive (accidents and damage) part of the policy.
Top of page image courtesy of the University of New Hampshire Move-In Guide.